The Financial Conduct Authority has outlined likely changes to its proposed compensation scheme for motor finance customers who were treated unfairly, including an implementation period and a simplified redress journey intended to help deliver compensation to millions of people in 2026. While considering more than 1,000 responses to its proposals and before making final decisions, the FCA indicated it is likely to introduce a three-month implementation period, with up to five months for older agreements, and allow firms to process claims sooner if they choose. Customers who complained before the scheme starts would no longer be asked whether they want to opt out; within three months of the end of the implementation period, their lender would tell them whether compensation is due and how much, and customers could accept a redress offer immediately. Firms would not be required to use recorded delivery and could use a range of communications channels with safeguards to prevent fraud. The FCA repeated its advice for consumers concerned about undisclosed commission to complain now, noting there is no need to use a claims management company or law firm and that doing so may reduce compensation by over 30%; it also reported removing or amending over 800 misleading adverts since January 2024 and intervening with five FCA-regulated claims management companies. If it proceeds with the scheme, the FCA expects to publish final rules in late March, outside market hours, and will confirm the date in advance.

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